Greven v. Municipal Property Assessment Corporation, 2015 CanLII 63570

Assessment Review Board

Issue Date: September 30, 2015

File No.: WR 133587

Assessed Person(s): Catherine Joy Greven and Robert Geoffrey Julian

Appellant(s): Catherine Joy Greven and Robert Geoffrey Julian

Respondent(s): Municipal Property Assessment Corporation ("MPAC") Region 17, Township of Lake of Bays

Property Location(s): 1301 Hutcheson Road

Municipality(ies): Township of Lake of Bays

Roll Number(s): 4427-020-008-10900-0000

Appeal Number(s): 3059351 and 3088255

Taxation Year(s): 2014 and 2015

Hearing Event No.: 587146

Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard: July 8, 2015 in Dwight, Ontario

Appearances:

• Catherine Greven (Self-represented)
• Robert Julian (Self-represented)
• Michelle D’Andrea (for MPAC)
• No one appeared (for Township of Lake of Bays)

Decision of the Board Delivered by Leslie Flemming

Introduction

1The subject property is vacant land situated on Rebecca Lake in the Township of Lake of Bays. The Appellants have enrolled the property in the Managed Forests Tax Incentive Program. The assessment returned for the valuation day – January 1, 2012 – was $116,000 for this 96-acre property with 2,510 feet of effective frontage on Rebecca Lake.

2Evidence for MPAC was presented by Michelle D’Andrea who referred to the specific sections contained in the Assessment Act, R.S.O. 1990, c. A. 31 ("Act") governing the particular method to be applied in the case of managed forests, and to sections of Ontario Regulation 282/98 dealing with how the assessment of managed forests properties is to be calculated.

3Evidence on behalf of the Appellants was given by both Catherine Greven and Robert Julian. Ms. Greven and Mr. Julian argued that the value of lands enrolled in the managed forests program is not governed by its location on water but by the use made of the property as a managed forest. They relied on a decision of this Board dated January 9, 2001, which determined that the current use of the property would determine how it is to be assessed, as opposed to its potential use or development for other purposes.

4Ms. Greven and Mr. Julian submit that the assessment of the subject property should be $218 per acre for a total value of $21,000 (rounded).

Issue

5What is the current value of the subject property, which is in the managed forests property class, as at January 1, 2012?

6Is the assessed value of the subject property equitable in relation to the assessed values of similar properties in the vicinity?

Decision

7The Board determines that the current value of the subject property is $27,000 (rounded) as at the valuation day, January 1, 2012.

8The Board finds that the evidence does not support a conclusion that the current value of the property as determined above requires an equity reduction.

9Accordingly, the assessment of the subject property is reduced for the 2014 and 2015 taxation years from $233,000 to $27,000.

Reasons for the Decision

Determination of Current Value

10Section 44.(3)(a) of the Assessment Act ("Act") requires the Board to first "determine the current value of the land". The definition of "current value" is contained in s. 1 of the Act:

"current value" means, in relation to land, the amount of money the fee simple, if unencumbered, would realize if sold at arm’s length by a willing seller to a willing buyer.

11Section 19 of the Act states:

19.(1) Assessment based on current value. – The assessment of land shall be based on its current value.

12The subject property is presently classified as managed forests lands. The following legislation applies to the valuation of this property class for 2013 and subsequent years:

13Section 19.(5.2) provides:

Conservation land, managed forests. – The current value of land that is conservation land as defined in the regulations or land in the managed forests property class shall be based only on the current use of the land and not other uses to which the land could be put.

14Section 19.(5.2.1) provides:

Current value of managed forests. – Despite subsection (5.2) and any other provision of this Act, the Minister may, by regulation, provide that the current value of the land in the managed forests property class shall be determined in accordance with the regulations.

15Ontario Regulation 282/98, s. 32.2(1) as amended ("Regulation"), sets out the rules respecting the assessment of current value where the parcel contains both managed forests and another property class. It provides:

32.1 (1) The current value of land in the managed forests property class shall be determined as follows for the 2013 and subsequent taxation years:

1. Determine the value of the land in accordance with subsection 19 (5.2) of the Act.

2. Determine the value of the land in accordance with subsection (2).

3. If the value determined under paragraph 1 is less than the value determined under paragraph 2, the current value of the land is the value determined under paragraph 1.

4. If the value determined under paragraph 2 is less than 31 per cent of the value determined under paragraph 1, the current value of the land is the amount calculated by multiplying the value determined under paragraph 1 by 0.31.

5. In any other case, the current value of the land is the value determined under paragraph 2. O. Reg. 656/05, s. 1; O. Reg. 394/08, s. 2; O. Reg. 339/12, s. 1.

(2) For the purposes of paragraph 2 of subsection (1), the value of the land is determined as follows:

1. Determine whether the geographic area in which the land is located is listed in Column 2 of Table 1 to Part IX.1 of this Regulation. If it is, take the step described in paragraph 2. If it is not, take the steps described in paragraphs 4 and 5.

2. If the geographic area is listed in Column 2 of Table 1, determine whether the land band for the land, as assigned by the assessment corporation, is listed in Column 3 of Table 1 for the applicable geographic area. If it is, take the steps described in paragraphs 3 and 5. If it is not, take the steps described in paragraphs 4 and 5.

3. For land located in a geographic area listed in Column 2 of Table 1 and assigned to a land band listed in Column 3 of Table 1, identify the applicable value per acre of the land as set out in Column 4 of Table 1.

4. For any other land, identify the applicable value per acre of the land as set out in Column 2 of Table 2 to Part IX.1 of this Regulation using the land band assigned to the land by the assessment corporation.

5. The value of the land is calculated by multiplying the applicable value per acre of the land by the acreage. O. Reg. 656/05, s. 1; O. Reg. 101/09, s. 1.

(3) In this section,

"land band" means a geographic area in which similar farm properties sell for similar prices, as determined by the assessment corporation under subsection 19 (5) of the Act. O. Reg. 656/05, s. 1.

16The best measure of current value is an arm’s length and market-tested sale of the subject property on or close to the valuation day of January 1, 2012. If no such transaction took place, a further measure of current value is derived from the arm’s length and market-tested sales of comparable properties in the same vicinity and market. This measure acts as a benchmark and gauge of the correctness of the assessed value of the land.

17Because the subject property consists entirely of managed forests lands, special provisions govern the calculation of the current value of this portion of the property. Section 19.(5.2) provides specifically that property within the managed forests class shall be assessed based on the "current use of the land" and "not other uses to which the land could be put." This legislation does not limit potential future use, but while the property remains in the managed forests class, it is subject to the advantageous assessment rules set out above.

18Ms. D’Andrea for MPAC testified that s. 19.(5.2) required the Assessor to assess the current value of the land – in this case as vacant land on water – and then to apply the provisions of s. 32.1 of the Regulation. She entered Exhibit 1, which provided four comparable properties sold between September, 2009 and December, 2012. None of the comparable properties was as large as the subject property, although Ms. D’Andrea argues that the property described as 80 Pointview Lane, at a size of 44.41 acres and frontage of almost 252 feet, was the most comparable. This property sold in February, 2012, for $160,000. This property is inferior to the subject property, Ms. D’Andrea stated, due to the difference in size of acreage and very large difference in waterfront, Ms. D’Andrea determined that the current value of the subject property was $376,000, which Ms. D’Andrea describes as the "ceiling" value. Ms. D’Andrea stated correctly that Table 1 to the Regulation ("Managed Forest Values by Geographic Area and Land Band") sets a rate per acre for properties in this land band at $283.00. Using her comparable properties as guides, Ms. D’Andrea reduced the current value of the subject property from $376,000 to $116,000, an amount she describes as the "floor" value. Ms. D’Andrea did not address the meaning of s. 19.(5.2) and 19.(5.2.1) and how it affected her interpretation of value. On cross examination, she confirmed that the current value is the starting point in the calculation, and that a property having waterfront will be assessed taking this feature into consideration prior to implementing the managed forests calculations.

19Mr. Julian and Ms. Greven both testified for the Appellants. They testified that the subject property had been classified as "managed forests" land for many years. They stated that there had been other appeals based on the interpretation of the managed forests regulation, but that their successful reductions of value of the subject property had never been implemented by the Township of Lake of Bays. They had never taken the steps available to them in s. 19 of the Statutory Powers Procedure Act, R.S.O. 1990, c. s.22 for the enforcement of orders, and instead appeal again to this Board.

20Mr. Julian and Ms. Greven filed a number of exhibits with the Board, including two topographical maps of the property (Exhibits 2 and 3); part of a letter dated August 11, 2004, setting out the history of the appeals to the Assessment Review Board to that point; an excerpt from an MPAC Farm Property Profile (Exhibit 5); A map of Rebecca Lake and Bella Lake and the various managed forests lands located in the neighbourhood plus their assessed values(Exhibit 6); a letter from the Township of Lake of Bays dated February 11, 2005, to Mr. Julian, indicating that it did not appear that there was an original shore road allowance abutting the subject property (Exhibit 7); e-mail correspondence from Stefan Szczerbak of the Township of Lake of Bays, dated February 20, 2015, indicating that there is an Original Shore Road allowance abutting the subject property that was available for sale (Exhibit 8). Lastly, the Appellants provided a copy of an earlier decision of this Board: Decision No. 1460370, dated January 9, 2001, relating to Complaint No. 1082276 for the years 1998, 1999 and 2000, filed by their father, William Geoffrey Julian.

21The Appellants argue that the rules respecting managed forests lands have not changed significantly from 2001, and that the correct current value of the land should be based on the legislated managed forests assessment rules and not on the potential value of the land for some other purpose. At the present time they have not purchased the original road allowance from the Township and technically do not own the shoreline. However, even if they did own the shoreline, their argument would remain the same.

Analysis

22It is clear from Ms. D’Andrea’s evidence that MPAC’s starting point or "ceiling" is the value of the subject property when assessed as vacant land on water. The large frontage on Rebecca Lake was taken into consideration by MPAC in deriving their "ceiling" value.

23Nowhere in the Act or Regulation does the legislation refer to "ceiling" and "floor" values. Section 19.(5.2) of the Regulation in respect of the assessment of managed forests requires a calculation of current value "based only on the current use of the land and not other uses to which the land could be put". In this case, the subject property is used solely as managed forests property. Since this is the only current use of the lands, the calculations set out in s. 32.1 (1) and (2) of the Regulation govern the assessment. The lands are covered by Table 1 to the Regulation, and are situated in Land Band 1701 with a value per acre of $283. Applying the rule, the subject property has a value of $283 X 96 = $27,168 or $27,000 (rounded).

24Because there is no other current value applicable to this parcel of land, no other calculations need be applied to the value such as those set out in s. 32.1(1)(3) or (4).

25While the value per acre of managed forests properties has changed since 2001 from $75 to $283, the principles implicit in valuing managed forests are the same. The Board accepts the reasoning of D. A. Richenback and J. Carpeneto in the decision released January 9, 2001. Managed forests lands with waterfront are no more valuable than managed forests without waterfront, and it is the current use of the property that is being assessed rather than a potential use.

Equity

26By implementing the correct calculations for managed forests lands, the Board has resolved the apparent inequity in assessment. If the Act and Regulation are followed, all managed forests in the same land band will be equitably assessed. No further adjustment is necessary in order the make the assessment of the subject property equitable with that of similar lands in the vicinity.

Conclusion

27The Board determines that the current value of the subject property is $27,000 (rounded) as at the valuation day, January 1, 2012.

28The Board finds that the evidence does not support a conclusion that the current value of the property as determined above requires an equity reduction.

29Accordingly, the assessment of the subject property is reduced for the 2014 and 2015 taxation years from $233,000 to $27,000.